162: 5 Ways Fiduciary Responsibility Guides Auction Advertising
I touch only one part of the auction process: the advertising campaign. So, I’m not someone to consult regarding human resources, bidding software, legal technicalities, facility selection, or bid calling techniques.
I used to think that terms like “fiduciary responsibility” belonged to the part of the auction process that happen away from my office. I know better now.
Cornell University Law School’s Legal Information Institute posted this summary of fiduciary responsibility:
“A fiduciary duty is a legal duty to act solely in another party’s interests. Parties owing this duty are called fiduciaries. The individuals to whom they owe a duty are called principals. Fiduciaries may not profit from their relationship with their principals unless they have the principals’ express informed consent. They also have a duty to avoid any conflicts of interest between themselves and their principals or between their principals and the fiduciaries’ other clients. A fiduciary duty is the strictest duty of care recognized by the US legal system.”
In the auction business, this duty means that we exclusively attempt to achieve the highest possible sale price for our sellers’ assets or at least the highest net financial gain for them. Some auctioneers might assert that this responsibility would also include doing all of the above in the shortest time possible.
Fiduciary duty doesn’t run on altruism, and that’s okay. The higher the asset selling price, the more commission auctioneers typically make. Almost everyone in our culture understands that both the asset owners and the commissioned sales representatives benefit from transactions.
This responsibility influences a lot of the advertising choices that auctioneers make every week. Budgeting decisions, media choices, and even design order can determine whether we as marketers are holding up our end of the fiduciary duty deal.
Pursue the right bidders, not necessarily the most bidders.
In the world of auctions, “something for everyone” probably isn’t even true; but it definitely should’t be the clarion call in our advertising. Getting a lot of spectators or even bidders should not be the goal of our advertising. The goal should be to entice the most motivated buyers. It can be more expensive to chase the most qualified and best-matched buyers, but it’s in our sellers’ best interest for us to take that approach.
Sell our sellers’ assets, not our events.
Does our advertising sell our auction or its assets? A good way to tell where your emphasis lies is by what is mentioned first, most, or largest. It’s not 50/50, either. In the vast majority of situations, the asset should cover far more space in an advertisement than content related to the event. We’re trying to sell the asset. In most cases, consumers will participate in our event only if they want the assets in it.
Sell our sellers’ asset, not our brand or marketplace.
If our logo is at the top of our advertising, we’re putting our needs and wants ahead of our duty to our sellers. When an ad from Amazon or other online retailer shows up in our browser margin, its content is dominated by the asset (or asset category) for sale and not by its source. All these retailers using tracking pixels know you’ll click the link only if you want what’s in the picture or headline—neither of which typically include the name of the store.
Make it as easy as possible for buyers to buy.
The easier it is for buyers to bid, the more likely it is that they’ll bid and continue bidding. So, the easier we make it to bid, the more competition can happen; and the higher sale prices can go. It’s our responsibility as marketers to pursue the most diverse ways and the most convenient times for consumers to place bids—stopping just short of that pursuit encroaching on our sellers’ bottom lines. All auctioneers should be moving toward enabling bids to be placed immediately after a consumer sees an ad, even if it’s just a pre-bid. “Buy now” and “bid now” prove to be powerful calls to action, especially in social media.
Leverage the most effective and efficient advertising possible.
Unless an auction company is using the advertising budget as a secondary revenue stream, our goals typically align pretty easily with our sellers’ hopes on this one. The challenge comes in knowing the best places to advertise as well as the best content to use for various asset categories. We should be constantly experimenting with a portion of our advertising budgets, and explaining to our sellers that this is a “paying forward” strategy that costs all sellers but also benefits all sellers. We should also be consistently measuring and recording the results of both our proven techniques and our experiments to know what is most efficient. It’s a never-ending process, as the media and cultural landscapes continually change.
Whether “fiduciary duty” can be found in our auction contract or not, it is always in our best interest to conduct business as if it is. That decision filter will lead us to make decisions that may not be easy but will be the right thing to do. Some of those decisions will be in our marketing plan.
Stock image purchase from iStockPhoto.com
Editing assistance by Gillian Zimmerman.